US stockmarkets were the real focus on Monday in shedding between 1.75% (DJI) and 2.85% (Nasdaq), as a slump in Apple (3.65%) battered the tech sector, with conflicting signals over the state of play between the US and China on their trade dispute keeping traders nervous.
The FX markets were mixed, with the commodity currencies trading a little lower against the US$ – care of the tensions between the US/China -, but which otherwise has been a bit heavy, not helped by softer US yields as the Fed’s Clarida’s comments from Friday – suggesting that a neutral rate may be at lower end of 2.5-3.5% range – still run through the markets. Elsewhere the Monday focus was in the Swiss Franc, which was the strongest of the majors although the underlying reason is unclear given that there is no immediate problem in emerging markets requiring a safe-haven, but it did drag the Euro along with it, with both currencies ending the day near session highs against the dollar. . Sterling has been choppy but without much direction as progress on Brexit remains unclear, while US$Jpy is marginally lower and following the stock markets.
In other markets, the metals are pretty much unchanged while oil fell early in the session but then regained its losses to close at the day’s highs.
The RBA Minutes are first up on Tuesday although there is little expectation of any surprise as the bank steers a neutral course in terms of policy. Europe will look to the German PPI and the UK Autumn Forecast for guidance, with BOE Governor Carney answering questions on the outlook, while the US will have the October Housing data. Note that the RBA Governor, Lowe, will be speaking during the European session. Most of the focus though will be on political headlines, so stay nimble.
Economic data highlights will include:
Tue: RBA Minutes, NZ Credit card Spending, BOJ Monetary Policy Statement, German PPI, RBA Governor Lowe Speech, UK Autumn Forecast Statement, BOE Governor Carney Speech, Global Dairy Trade Index , CBI Distributive Trends Survey – Orders, US Housing Starts, Building Permits, API Weekly Crude Oil Stock Inventory
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